Why Should I Hire a Fractional COO Over a Full Time Position?

Good leadership is vital to the success of any organization—yet sometimes, the budget doesn’t quite allow for a full-time executive. This is why many people are going the fractional executive services route, for CEOs, COOs, CFOs, CTOs, CIOs, and any other C-suite position you can think of. 

Besides the cost savings, the fractional model offers many other benefits to a traditional, full-time executive. In this article, we’ll take a look at fractional COO services specifically, from knowing when to hire one to all the cost saving details. 

Do You Need a Chief Operating Officer (COO)?

A COO can certainly be helpful to the operation side of your nonprofit or business, but they might not always be a necessity. Before hiring a COO in any capacity, be sure you are filling a need and not simply pouring money into another salary. You usually won’t see a full-time COO on smaller teams, but large organizations rely heavily on COOs and other full-time executives working together as a team. 

This leaves many growing nonprofits and businesses wondering, “When should a company have a COO?” And unfortunately, there isn’t an exact answer to this question, as it depends on the needs of your organization. Some companies might never need a COO, while others may benefit from hiring a COO early on due to overwhelming growth or intricate operations.  

As you evaluate your need for a COO, here are some signs it might be time to start searching for candidates:

• You have a CEO or executive director, but they have too much on their plate to continue handling day-to-day operations.
• You want to build additional revenue streams, like new services or donor growth, but simply don’t have the time or energy.
• You currently only have one executive, and that person is wanting more leadership perspective on higher level ideas and strategies. 
• You know or suspect your CEO may be leaving the company, and you’d like to test out a CEO candidate in the COO position while your current CEO is still present. 
• You’d like to see more or smoother communication between internal teams and volunteers, but you have no one who can spare the time to make that happen.
• Your current leadership is young or inexperienced and needs some additional guidance and mentoring from another executive. 

The great thing about hiring C-suite executives is that you don’t have to hire someone in a full-time capacity. Fractional executives are trending in the nonprofit and business world, and for good reason. You can get executive-level COO experience to help with all the above issues—but for a fraction of the cost.

How Much Do You Pay a Fractional COO?

The cost difference between a fractional and full-time executive is really what sells the fractional executive model. There is quite a wide range of salaries for COOs, but many of them are at least six (sometimes even seven) figures. 

You can actually find out current full-time COO salaries for public businesses and nonprofits, as the SEC and IRS both have salary disclosure requirements for highly-compensated executive officers. Based on this publicly available information, here is a sample of what some of the big COOs are making in a few different industries currently:

• Joseph Shugrue, COO of Atlas Financial Holdings, Inc. (finance), made $474,216 total in 2020. 
• Mary Lou Burke Afonso, COO of Bright Horizons (education), made $1,768,151 in 2021.
• Billy Pardo, COO of My Size Inc. (retail), made $310,000 in 2020.  
• Clifford Holtz, COO of the Red Cross (nonprofit healthcare), made $781,120 in 2020. 

Of note, these are definitely on the higher side of the full-time Chief Operating Officer salary range, but it gives you an idea of how expensive this full-time expertise can get. Salary.com estimates that the average range for COO salaries falls between $360,918 and $601,479. For nonprofit COOs, they estimate the average range to be between $107,279 and $178,784.

Regardless—that’s a lot of money. This is what makes a fractional COO so appealing. How much do you pay a fractional COO? It’s estimated that the monthly cost of a fractional COO salary is between $6,000 to $10,000. And many fractional executives offer their services on an “as needed” basis, meaning you can use their expertise as much or as little as you want (or can afford). 

Want to Learn More About Fractional Executive Services? Computers in Ministry Has the Answers

At Computers in Ministry (CIM), we are passionate about helping organizations fulfill their mission, accomplish their objectives, and maintain healthy stewardship of their resources. These are some of the many reasons we offer fractional executive services to our customers—they get access to a wealth of experienced, executive knowledge for a price that comfortably fits into most nonprofit budgets. 

If you’d like to learn more about our fractional executive services and our wide variety of technology solutions, get in touch with us! We’d love to support your organization through launch, growth, and beyond.